Item 5—Shareholder Proposal Relating to the Company’s Employment Policies

Mr. Thomas Strobhar, 2121 Upper Bellbrook Road, Xenia, Ohio 45385, owner of 50 common shares, has advised us that he plans to introduce the following resolution:

Whereas, it would be inappropriate and possibly illegal to ask a job applicant or employee about their sexual interests, inclinations and activities.

Whereas, it is similarly inappropriate and legally problematic for employees to discuss personal sexual matters while on the job.

Whereas, unlike the issues of race, age, gender and certain physical disabilities, it would be impossible to discern a person’s sexual orientation from their appearance.

Whereas, according to the Human Rights Campaign (HRC), the largest national lesbian, gay, bisexual, and transgender political organization, on their website states, “an inclusive non-discrimination policy (one that refers to sexual orientation) is a key facet of the rationale for extending domestic partner benefits.” The HRC adds, “Establishing a benefits policy that includes your company’s gay and lesbian employees is a logical outgrowth of your company’s own non-discrimination policy….”

Whereas, domestic partner benefit policies pay people who engage in homosexual sex acts, which were illegal in this country for hundreds of years, and have been proscribed by the major traditions of Judaism, Christianity and Mohammedism for a thousand years or more.

Whereas, cohabitation, regardless of sexual orientation, is illegal in North Carolina, North Dakota and several other states.

Whereas, the Armed Forces of the United States is one of the largest and most diverse organizations in the world. They protect the security of us all while adhering to a “don’t ask, don’t tell policy” regarding sexual interests.

Whereas, our company does not discriminate against tobacco users when they apply for a job even though they are not protected by any employment clause. It also does not pay tobacco users benefits based on their engaging in this personally risky behavior.

Whereas, those who engage in homosexual sex are at a significantly higher risk for HIV/AIDS and sexually transmitted diseases.

Whereas, marriage between heterosexuals has been protected and encouraged by a wide range of societies, cultures and faiths for ages.

Resolved: the shareholders request that American Express form a committee to explore ways to formulate an equal employment opportunity policy which complies with all federal, state and local regulations but does not make reference to any matters related to sexual interests, activities or orientation.

Statement: While the legal institution of marriage should be protected, the sexual interests, inclinations and activities of all employees should be a private matter, not a corporate concern.

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The Board of Directors recommends that you vote AGAINST this proposal for these reasons:

The Board believes that the proposal, if implemented, would prevent the Company from providing employee benefits for domestic partners. Amending the Company’s equal employment opportunity policy to exclude reference to sexual interest, activities or orientation would put the Company at risk of being in violation of laws in numerous states and cities in which the Company does business.

The proposal would also interfere with the Company’s ability to tailor its employment and benefits policies and to attract and retain a diverse workforce. While the proposal calls for a study group to explore ways of formulating employment policies that are free from references to sexual orientation, the Board of Directors believes that the supporting statement’s references to domestic partner benefits indicate an intent to require the Company to discriminate against same sex domestic partners.

The proposal is also unwise because it deals with employee matters that relate solely to the Company’s ordinary business operations. Certain tasks, such as constructing employment policies that are designed to attract and retain an effective workforce, are fundamental to management’s ability to run a company on a day to day basis and should not be assigned to shareholders to decide. The establishment of a special committee, as the proponent suggests, intrudes upon management’s own responsibility to manage the Company.

Management has developed policies that both comply with the laws of the jurisdictions in which the Company operates and are in the best interests of the Company, our customers and our shareholders. The proposal would interfere with these fundamental responsibilities of management.